Projected Wisconsin budget deficit generates criticism
The Business Journal Date: Thursday, February 9, 2012
A Wisconsin report predicting a $143.2 million deficit when the state’s two-year budget expires is generating a stir of statements from Democrats criticizing Gov. Scott Walker.
The state prepares annual projections on whether taxes and other sources of money will be enough to pay off the spending approved in the current budget. An October 2011 report predicted a $72.7 million surplus, but since then projected tax collections have dropped by $272.8 million. Combined with other decreases in anticipated revenue, the state would be $143.2 million short when the current budget expires at the end of June 2013, according to the Legislative Fiscal Bureau.
The projected tax collections dropped after economic forecasts became more pessimistic. Also, revenues are expected to decrease because of changes in state law that could result in higher income tax returns this year compared with last year and law changes that could reduce corporate income and franchise tax collections.
Under state law, the governor’s office is required to submit a bill to balance the budget if there is a significant shortfall. The administration is considering ways to balance the ledger, such as refinancing or restructuring debt, according to the fiscal bureau report.
Walker’s office responded to the report with a printed statement.
“Moving forward, we’re confident in our ability to finish the biennium with a balanced budget,” the statement said. “As we have done in the last year, we will continue to manage the Wisconsin taxpayers’ money well, so we can keep the state’s fiscal house in order. We’ll keep our budget balanced without the job-killing tax increases implemented in the years before we took office; tax increases that led to over 150,000 Wisconsinites losing their jobs in the years before we took office.”
Democrats fired back with their own statements. Dane County Executive Kathleen Falk, who will run against Walker if there is a recall election, issued a statement saying “Under Gov. Walker’s actions, Wisconsin has lost jobs each of the last six months in a row, the worst record in the nation.”